NICOSIA—Opening Day 1 of Gulf Publishing Company's fifth annual Eastern Mediterranean Gas Conference (EMGC) on 21 March was Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry and Tourism for the Republic of Cyprus.

The Minister welcomed attendees and shared perspectives on energy development in Cyprus and throughout the region. Lakkotrypis' talk was followed by a keynote presentation from Luca Bertelli, Chief Exploration Officer at Italy's Eni.

Ministerial welcome and energy analysis. Lakkotrypis called Eni's Calypso discovery offshore Cyprus a "promising discovery," and said he looks forward to hearing from Eni about the future of that activity. The strategy of the Cyprus government, the Minister said, focuses on ongoing discoveries of natural gas, as well as those resources that will be discovered after the first cycle of exploration is concluded at the end of 2018 or the beginning of 2019.

Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry and Tourism for the Republic of Cyprus

"It will give us a good idea of what kinds of resources we have in Cyprus," the Minister said. He added that the Zohr-like play discovered in Cyprus' Exclusive Economic Zone (EEZ) promises the discovery of additional, important resources.

"As we are fulfilling our strategy," Lakkotrypis said, "I would like to focus on one thing: the development of the Aphrodite discovery." Cyprus has been in talks with Egyptian partners for the sale of gas for export as LNG. Lakkotrypis noted that Cyprus has recently submitted an official agreement to the EU government for the regulation of a pipeline between Cyprus and Egypt. A decision is expected to be reached in a few weeks.

"We remain committed to the Egyptian government, and also to our partners here in Cyprus," Lakkotrypis confirmed. Although Cyprus' Aphrodite field will be costly to develop, working with Cyprus Hydrocarbons Company has brought the play to an advanced stage.

"Despite the political challenges we face as a country and as a region," Lakkotrypis said, "particularly with regard to Cuttlefish [a resource play discovered offshore Cyprus that has been disputed by Turkey and Turkish Cypriots], we will continue as a government to work with the countries in the region, and we will continue to become closer with the countries in the region, not only to advance the interests of Cyprus but also to advance the interests of the region as a whole."

Bertelli: Eni sees rapid movement on Zohr. Following Minister Lakkotrypis' opening talk, Luca Bertelli, Eni's exploration head, shared a keynote speech with an updated review of the Levantine Basin, where more than 130 billion cubic feet (Bft3) of gas have been discovered.

Luca Bertelli, Chief Exploration Officer, Eni

Bertelli noted that the first well of the Zohr play, a huge gas reserve Eni discovered offshore Egypt, was drilled in the deep offshore of Levantine targeting a completely different play. Drilling commenced in 2015, resulting in an outstanding gas discovery of 30 Bft3. The Zohr field—which Bertelli called "a game-changer," has now opened up room for new discoveries in the same play.

Zohr revamped interest in the Levantine Basin with new, important players coming into the Eastern Med, the Eni Chief said. New, significant investments in seismic prospects and drilling have occurred as a result. Zohr-like plays, such as that discovered offshore Cyprus' EEZ, could add further, significant volumes to the Eastern Mediterranean resource pool.

2017: An exciting year for Levantine. Much movement has been seen in the Levantine Basin over the past year. Bertelli reviewed main events, including Lebanon offering of five blocks in a first bid round in January 2017; Noble Energy sanctioning Phase 1 of the Leviathan development in February 2017, with first gas targeted for the end of 2019; Cyprus awarding three blocks in April 2017 after its third international bid round; and exploration drilling in July 2017 in Block 11 by a joint venture (JV) of Total and Eni.

In the second half of last year, Israel awarded five blocks in December 2017 from 2016 Round A, with further licensing rounds planned for 2018; Zohr saw operational startup in the same month; and drilling of the Calypso 1 well by Eni and Total commenced in January 2018, along with Lebanon's awarding of two blocks on its first international bid round. Additionally, Egypt's EGAS will announce new licensing rounds in the Nile Delta and Eastern Mediterranean offshore in the second half of 2018.

"This review is to show everybody that things are moving, and that new and important events are occurring," Bertelli said. He added, "Many of these activities stemmed from the initial discovery of the Zohr play."

Cyprus potential: Calypso and Aphrodite. Eni's recent work on Calypso, which contains lean gas with 99% methane, proves the extension of the Zohr-like play further northwest, Bertelli noted. At present, the Eni and Total JV is assessing the existence of further prosperity in Block 6 and Block 11 for potential drilling, and to assess the viability of Calypso. If the Calypso discovery is positively appraised, Bertelli said, the JV will evaluate viable options for commercialization of the resources. Also, ExxonMobil will drill in Block 10 in Cyprus' EEZ in late 2018.

With regard to the Aphrodite play, Bertelli noted that a POD has been submitted, although the project has not yet been sanctioned. "We need trunklines to transport the gas from the Republic of Cyprus to Egypt, and we are adding new trunklines for the new volumes where we need to ramp up the project," Bertelli noted.

Eastern Med export aspirations. Bertelli turned to the subject of exports and the establishment of a regional gas hub in the Eastern Mediterranean. After domestic market prioritizations, the question remains whether enough gas will be available for export.

"Liquefaction capacity already present in Egypt that is partially idle must be prioritized," the Eni Chief asserted. Gas sent to the Idku and Damietta LNG terminals in Egypt can supply the Eastern Med, as well as Europe. Bertelli called Egypt's LNG operations "the simplest, fastest and most economical way to utilize gas for export."

However, the construction of a proposed, new pipeline to transport gas to Egypt will require massive investment and political acceptance among the region's various countries to be realized, Bertelli cautioned. Also, additional gas volumes must be discovered to make the construction of such a pipeline viable. "The security of long-term gas supply must be ensured before the pipeline can be considered feasible," Bertelli said. "We need more exploration, more gas and larger volumes."

Alternatively, in the case of new, massive gas discoveries offshore Cyprus, new LNG infrastructure could be developed on the island, Bertelli said.

Bertelli concluded his keynote by posing the question: "Is the Eastern Mediterranean a potential gas hub for Europe?" Geopolitical concerns remain, so a simple and economical solution must be found to make this cooperation a reality. "We hope that these developments can create energy—and create peace—for all Eastern Mediterranean countries," the Eni Chief said.

EMGC 2018 is taking place at the Hilton Cyprus in Nicosia, Cyprus, from 21–22 March.

The global LNG industry is becoming increasingly interconnected as grassroots export projects get off the ground. Another technology route for processing gas into fuels—GTL—is attracting renewed attention due to improving economics. Small-scale solutions for both LNG and GTL are at the forefront of new technological developments, while major projects using more conventional technologies continue to start up around the world.